Labeyrie EBITDA Beats Budget in November; King Cuisine Site Sale, Working Capital Boost Cash; Loans Rally to the 90s

French fine foods producer Labeyrie is on track to deliver solid earnings growth and continue to delever during its key Christmas trading period after reporting strong November results, helped by improved demand for foie gras and smoked salmon, sources said.

The group generated €105.4 million of revenue in November 2024, which was slightly below €113.4 million budgeted but up on the €98.2 million the group achieved the same month in 2023, driven by volumes rising to 5,983 tons from 5,741 tons over the same period a year earlier. EBITDA reached €12 million, which was well ahead of the €10.7 million budgeted and €10.6 million for the same month in 2023, while EBITDA excluding exceptionals came to €9.6 million versus €8.8 million budgeted and €8.7 million in the prior year period.

Year-to-date sales grew to €363 million as of November from €339.8 million for the same period in 2023, while EBITDA jumped to €27.6 million from €14.9 million. Labeyrie generates around 80% of its earnings over the Christmas period.

LTM EBITDA improved to €77.1 million as of November. The group had budgeted increasing sales by 11% to €964.2 million during its fiscal year ending June 2025, driven by 10% volume growth and a 1% price increase, and growing EBITDA 15% to €73 million.

Labeyrie had €30.4 million of cash on balance sheet while its €65 million RCF was undrawn at the end of November. But when adjusted for seasonal working capital outflows, its cash balance has improved to €61.7 million, which was partly driven by the disposal of its King Cuisine site for around €7.1 million.

Labeyrie was 5.1x net levered through its OpCo debt as of Nov. 30, which was a big step down from 7.5x the same time a year earlier. On the current trajectory, it could delever to below 5x by its financial year-end in June 2025, by when it will need to deal with its maturities, sources agreed.

The group’s term loan matures concurrently with its RCF in July 2026. The base case for most lenders has long been an amend and extend request, but given the improving metrics and the rally in the group’s term loans into the 90s a straight refinancing no longer looks completely out of the question, sources noted.

The group’s loans are quoted at around 90.5/91.5, up from the low 70s in September last year. The rally was driven by the continued improvements of the group’s earnings as well as a constructive -sellside note by Barclays, one source noted.

As of Nov. 30, the group’s net OpCo debt totaled €425.7 million, comprising an undrawn €65 million RCF due July 2026, a €455 million term loan due July 2026, €1.1 million of finance leases, as well as €30.4 million of cash on balance sheet, leaving the group 5.1x net levered. The group’s capital structure also includes a HoldCo PIK provided by Partners Group, due December 2026, which amounted to €169 million as of December 2023.

Labeyrie’s ownership structure could complicate any potential support since sponsor PAI Partners only owns 46% of the group, with 46% owned by a co-operative of duck producers that provides the group with all its duck-related products and the remaining 8% in the hands of management.

Labeyrie’s capital structure as of Nov. 30, 2024, is below:
 

According to Octus’ CLO database, loans of Labeyrie Fine Foods are held by the following managers. Click HERE to view the full list of holders in the database.
 

To see the covenant analysis or to talk to one of our legal analysts, click HERE.

Sponsor PAI Partners declined to comment.